Estates, Gifts, And Trusts (EGT)

Life Insurance — A Practical Guide for Evaluating Policies (Portfolio 827)

  • This Portfolio covers the evaluation, selection, and purchase of life insurance and describes life insurance basics, and the tax preferences life insurance enjoys.


The Bloomberg Tax Portfolio, Life Insurance — A Practical Guide for Evaluating Policies, No. 827, is a guide to the evaluation, selection, and purchase of life insurance. The Portfolio provides a brief section on life insurance basics and a description of the tax preferences life insurance enjoys. The Portfolio then provides a detailed analysis of the six basic questions that an insured and his or her advisor should ask when purchasing life insurance.

As part of the basics, the Portfolio defines life insurance terms and clauses, such as cash value, term life insurance, and permanent insurance. The Portfolio then outlines the income-tax-favored nature of life insurance, the tax-deferred growth of cash value accounts, and how to access those cash value accounts.

The Portfolio provides guidance on the amount of life insurance to buy. The Portfolio analyzes such factors as the insured’s death benefit needs, estate tax payments, estate liquidity, and pension maximization plans. The Portfolio also discusses cash accumulation needs and business needs.
Next, the Portfolio examines the types of life insurance available to buy. The Portfolio analyzes term insurance, whole life policies, universal life policies, and variable life policies. The Portfolio addresses single versus joint policies, policy riders, and the allocation of risk among the various types of life insurance.

The Portfolio outlines the steps in the purchasing process. The Portfolio addresses third-party advisors, agents and brokers, solicitation of multiple offers, and the application process. The Portfolio also analyzes the medical examination process and the underwriting process.

The Portfolio provides strategies on obtaining the best deal. The Portfolio points out hidden costs and discusses guarantees, agent/broker commissions, and the differences among various jurisdictions. The Portfolio tells the insured how to compare offers and evaluate life insurance illustrations, policy performance, and carriers.

The Portfolio next examines ways to structure life insurance holdings, private placement life insurance, leveraged life insurance, and offshore life insurance products.

The Portfolio concludes with guidance on obtaining in-force illustrations, premium payment considerations, common pitfalls, and exit strategies.

This Portfolio may be cited as Lee and Wilkey, 827 T.M., Life Insurance — A Practical Guide for Evaluating Policies.

Table of Contents

I. Introduction
II. How Much Life Insurance Do I Need?
III. What Type of Life Insurance Should I Buy?
IV. What Are the Steps in the Purchasing Process?
V. How Do I Get The Best Deal?
VI. What Other Things Should I Consider?
VII. How Do I Evaluate My Policy on an Ongoing Basis?

Craig Wilkey
Managing Director
Seawall Financial LLC
Gary Lee
Third Party Advisor Services
Sterling Resources Ltd.
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